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Index Update: The S&P/ASX 200 finished higher on Wednesday, adding 24.90 points (+0.28%) to 8,960.50. The index is up 0.48% over five sessions and sits 1.04% below its 52-week peak. Sector breadth was positive with 7 of 11 groups advancing alongside the benchmark. Materials led gains, up +1.42% (+3.24% over five days), followed by Health Care (+0.81%), Consumer Discretionary (+0.55%), Financials (+0.54%), Energy (+0.49%), Utilities (+0.42%) and Industrials (+0.36%). Laggards included Consumer Staples (-4.99%), Information Technology (-2.67%), Telecommunications Services (-1.02%) and A-REITs (-0.31%).

Macro Update: The monthly Consumer Price Index (CPI) rose 2.8% in the 12 months to July 2025, according to data released today by the Australian Bureau of Statistics (ABS). This marked an increase from 1.9% in June and represented the highest annual inflation rate since July 2024, after several months of easing price growth. Housing (+3.6%), food and non-alcoholic beverages (+3.0%), and alcohol and tobacco (+6.5%) were the main contributors to the rise. The annual trimmed mean inflation also edged higher, reaching 2.7% in July, compared with 2.1% in June, and aligning with levels observed three months earlier.

On the global front, President Donald Trump’s bid to dismiss Federal Reserve Governor Lisa Cook is seen as unlikely to derail the U.S. central bank’s expected rate cut next month, though it raises fresh questions over the Fed’s independence. Markets continue to price in an 86% chance of a quarter-point reduction at the September 16-17 meeting, which would lower the benchmark rate to a 4.00%-4.25% range.

Top Market Movers: Tabcorp Holdings (ASX: TAH) led the gains, rising 23.94% to AUD0.88, followed by Siteminder (ASX: SDR), which surged 21.10% to AUD6.60, and Lovisa Holdings (ASX: LOV), advancing 13.24% to AUD41.23. On the downside, Domino’s Pizza Enterprises (ASX: DMP) slumped 22.01% to AUD15.10, Woolworths Group (ASX: WOW) dropped 14.69% to AUD28.51, and Wisetech Global (ASX: WTC) declined 11.86% to AUD102.02, ranking as the day’s top three losers.

Commodity Update: The dollar remained under pressure on Wednesday as concerns over the Federal Reserve’s independence resurfaced after President Trump’s latest move to exert influence on the central bank. Gold inched up 0.01% to USD 3,433.60, while silver slipped 0.08% to USD 38.575 and copper eased 0.02% to USD 9,845.65. Brent crude edged down 0.06% to USD 66.66, with oil prices steady as markets awaited new U.S. tariffs on India’s Russian crude imports.

Our Stance: The S&P/ASX 200’s modest 0.28% gain to 8,960.50 masks a market increasingly caught between optimism in cyclical sectors and rising inflation pressures. Materials and Health Care led, reflecting investor appetite for tangible growth, yet the sharp drop in Consumer Staples and Domino’s (-22.01%) suggests caution is creeping into consumer-facing stocks. July’s CPI surge to 2.8% underscores that inflation remains sticky, likely influencing the RBA’s policy stance in the months ahead. Meanwhile, global uncertainties, including Trump’s move against Fed Governor Cook, keep markets on edge. Overall, the ASX appears resilient, but selective stock exposure will be crucial amid macro headwinds.

In its latest session, the S&P/ASX 200 Index advanced 24.90 points to close at 8,960.50, supported by a bullish candlestick formation and strong trading volumes—clear signals of sustained investor confidence. On the daily chart, the index continues to trade firmly above its 21-period Simple Moving Average (SMA), a dynamic support level that underpins the positive short-term outlook. Key support is identified at 8,870.70, with strength above this zone crucial to preserving the integrity of the uptrend. On the upside, a decisive breakout above near-term resistance would serve as a strong bullish confirmation, potentially unlocking further momentum and shifting market sentiment more decisively in favour of the bulls. From a broader perspective, the index’s sustained position above the 21-period SMA on the weekly chart further highlights its resilient long-term bullish foundation.